Legislation Brings Labor Compliance Monitoring Regulations to Forefront

AB 436, by Assembly Member Jose Solorio, was gutted and amended on Tuesday and now contains language allowing California Department of Industrial Relations (DIR) regulations pertaining to labor compliance monitoring, passed in a 2009-10 budget trailer bill, to move forward.

As you may recall, SB 2X 9 (Chapter 7, Statutes of 2009) required all public entities to pay a fee to DIR for labor compliance program (LCP) enforcement and monitoring in place of maintaining or creating their LCP. This fee applies to all projects funded through bonds issued by the state as well as specified design-build projects. Awarding bodies wishing to maintain existing LCPs may be eligible for a fee waiver from DIR, but only if the LCP covers all public works projects. SB 2X 9 specifically set limits on the fee amounts: for bond projects, the limit is one-quarter of one-percent of the state bond proceeds; for design-build projects, the fee limit is one-quarter of one percent of the total project cost.

Last October, the state’s public works board (SPWB) sent a letter to DIR stating that, due to the adopted SB 2X 9 regulations, it would be unable to issue lease revenue bonds to pay for $17 billion worth of current capital outlay projects. SPWB explained that prior to issuing such bonds, the Attorney General issues an unqualified opinion letter which states that the issuance of SPWB lease revenue bonds are in compliance with all state law requirements. This letter is heavily relied upon by the investing public when the bonds are issued. The Attorney General made clear that he would refuse to provide these letters for bonds covered by the recently adopted SB 2X 9 regulations, concerned about the legality of using bond funds to pay fees that don’t correlate with the cost of ensuring prevailing wage compliance on projects. As a result, hundreds of capital outlay projects would not receive the funding necessary for their completion. In response, DIR took immediate action to suspend the regulations, and did so again this past July, to resolve the underlying legal issues.

AB 436 amends existing statute to resolve those issues; language in the bill reads that it is intended to clarify the method by which DIR may charge and be reimbursed for monitoring and enforcing compliance with prevailing wage requirements on public works projects paid for with public funds obtained from state-issued revenue bonds. Specifically, AB 436:

• Authorizes DIR to monitor and enforce prevailing wage requirements for any public works project paid for in whole or in part out of public funds derived from state-issued bonds.
• Authorizes DIR to charge awarding agencies a reasonable fee for costs directly related to such enforcement and compliance.
• Creates the State Public Works Enforcement Fund (SPWEF) in which all fees collected by DIR are to be deposited and must only be used for DIR to monitor and enforce labor compliance with prevailing wage requirements on projects paid for with public funds that are derived from bonds issued by the state.
• Provides for a $4.3 million loan from the Uninsured Employers Benefit Trust Fund to SPEWEF for startup costs related to the Labor Compliance Monitoring Unit within DIR.

AB 436 is currently awaiting a vote on the Senate Floor.

Labor Bills Receive Senate Approval

Two bills sponsored by the American Federation of State, County and Municipal Employees (AFSCME) passed off the Senate Floor last week and now await concurrence votes in the Assembly. CSAC is strongly opposed to these bills and counties are encouraged to contact their legislative representatives to relay their concerns.

AB 646 (Atkins) – Oppose
As Amended on June 22, 2011

AB 646, by Assembly Member Toni Atkins, would authorize an employee organization, if a mediator is unable to effect settlement of a contract impasse within 30 days of his or her appointment, to request that the matter be submitted to a factfinding panel. 

The bill would require that the factfinding panel consist of one member selected by each party as well as a chairperson selected by the Public Employment Relations Board or by agreement of the parties. If the matter is not settled within 30 days, AB 646 would require the factfinding panel to make findings of fact and recommend terms of settlement, for advisory purposes only. 

AB 646 would require that these findings and recommendations be first issued to the parties, but would require the public agency to make them publicly available within 10 days after their receipt. The bill would require all costs associated with the factfinding panel to be shared equally by the public agency and employee organization.

AB 646 would prohibit a public agency from implementing its last, best, and final offer until at least 10 days after the fact finders’ written findings of fact and recommended terms of settlement have been submitted to the parties and the agency has held a public hearing regarding the impasse.

AB 1203 (Mendoza) – Oppose
As Amended on August 22, 2011

AB 1203, by Assembly Member Tony Mendoza, would require local public agencies to provide paid leaves of absence to public agency employee representatives of recognized employee organizations when they are participating in the following activities:

• Formally meeting and conferring with public agency representatives within the scope of representation.
• Testifying, participating or representing the employee organization in conferences, hearings or other proceedings before the Public Employment Relations Board in matters relating to charges filed against the public agency by the employee organization.
• Testifying, participating or representing the employee organization at personnel and merit commission hearings, city council meetings and labor management committee hearings.

Recent amendments to AB 1203 remove language that would allow local collective bargaining agreements to provide for compensated leave time for participation in union activities. AB 1203 is an unnecessary and redundant bill that requires counties to provide to their employees what is already protected by current law or through locally negotiated agreements.